CRISIL has assigned its ratings of ‘BB+/Stable’ to the bank facilities of Cotwall Commerce Pvt Ltd (Cotwall). The ratings factor in Cotwall’s exposure to risks relating to limited geographic diversity in its revenue profile, and working-capital-intensive operations. These weaknesses are however, partially offset by ratings by the benefits that Cotwall derives from having an established brand, Tripti.

For arriving at its ratings, CRISIL has taken a consolidated view of Cotwall, Mahabir Impex Pvt Ltd, and Grover Commerce Pvt Ltd. This is because the three companies, collectively referred to as the Kaushik Kumar Nath (KKN) group, have a common management; they are engaged in similar lines of business, and sell products under a common brand, Tripti.

Outlook: Stable
CRISIL expects Cotwall to maintain a stable credit risk profile over the medium term, backed by its established market presence in the Eastern region. The outlook may be revised to ‘Positive’ if the company’s financial risk profile improves substantially; or to ‘Negative’ if the company reports sluggish growth in revenues and profitability, or undertakes large, debt-funded acquisitions.

About the Company
Cotwall, set up in 1995, was acquired by Mr. Kaushik Kumar Nath from Mr. Siddharth Roy in 2003. The company trades in tea, edible oils, pulses, spices, rice, atta, and maida. Cotwall and other group companies sell products under a common brand, Tripti. The KKN group reported a profit after tax (PAT) of Rs. 6.5 million on net sales of Rs. 869 million for 2008-09 (refers to financial year, April 1 to March 31), as against a PAT of Rs.4.2 million on net sales of Rs.632 million for 2007-08.